Idaho's Weekly Journal of Local & National Commentary Week
2815

The secret function of all central banking cartels -- from the simplest
money changers of Jesus’ time to today’s complex Federal Reserve -- is to
create clever monetary schemes by which to force fake money into an economy
and transfer the wealth of citizens into the bankers’ pockets. The bankers’
methodology is to cloak their scam in unintelligible VooDoo Economics and
their moral philosophy is always an altruistic collectivist euphemism such
as, “to save the nation,” or “help the poor.”

In a USA
Today article “Crisis at Fannie, Freddie bares
fundamental flaws,” the authors discuss what a great idea it was
to create these two socialist mortgage institutions to allegedly save the
poor (altruistic reasons) and how they could be managed better by the
federal government (national socialism) to stave off their impending
bankruptcy. The authors of the USA article put forth the tired old argument
that what we need to save Fannie and Freddie from it’s current corruption
and bankruptcy is management by “good socialists” instead of “bad
socialists, as if there is such a thing as “good socialism” vs. “bad
socialism.” Nobody questions whether it is socialism per se that is the
problem. Nobody proffers the concept that the free market is the only moral
and rational economic method by which to retain individual liberty, which is
the basis for the functioning of a true free market economy. Nobody points
out that if one destroys individual rights, one destroys the market.

Just when
you think the USA Today authors get it, they skirt the moral philosophical
premise of individual rights as the basis for a true free market and,
instead, meander through a labyrinth of standard altruistic collectivist
verbiage even though their empirical observation of Fannie and Freddie’s
history is rife with huge special interest profits from blatant corruption.

As the USA
article starts out, with a lot of altruistic collectivist excuses and VooDoo
Keynesian Economics:

“Mortgage
giants Fannie Mae and Freddie Mac like to portray their mission as something
akin to George Bailey’s in the 1946 Frank Capra classic [movie] It’s a Wonderful Life.
By buying home loans from banks, they provide stability and liquidity to
mortgage markets. This helps average Americans, some of them of modest
means, buy their homes.

Recent events suggest a better comparison might be to
The Wizard of Oz.
While Fannie and Freddie don’t deal directly with the home-buying public,
they own or have guaranteed a staggering $5.2 trillion in mortgages. This
makes them like a pair of men behind the curtain pulling levers that keep
the housing market humming.

Now the curtain has been pulled back, exposing an ugly reality. Despite
years of warnings, the companies never set aside enough money to cover
losses if the housing market turned sour. That’s one reason the federal
government readied a rescue plan for them over the weekend. These companies
are simply too important, not just to housing but to the entire economy to
be left to flounder.

While the size of this bailout plan – which includes an extended line of
credit from the Federal Reserve and authority for the government to buy
shares in one or both companies – is remarkable, bailouts have in fact long
been part of Fannie and Freddie’s business model.

Since they were chartered as government-sponsored, publicly-traded
corporations four decades ago, they have used their lobbyists and political
allies to bail them out of minor pinches. When critics suggested, say, that
they should be required to report to the Securities and Exchange Commission
like other corporations, or pay state and local taxes, or increase their
capital reserves, their influence-peddling machine went into action.”

The
authors go on to suggest that what is needed is more management by the
federal government. Buzz, wrong.

Note what
is really going on between the central banking cartel, the Federal Reserve,
and Fannie and Freddie. The Fed central bankers provide the fake paper
money, printed up out of thin air, while Fannie and Freddie provide the
vehicle, the pipeline, by which the central bankers inject their fiat
currency into the market. The central bankers earn interest on the
principal they created out of thin air. So does Fannie and Freddie. Plus,
the members of Fannie and Freddie receive huge salaries and bonuses. All to
“save” or “help” the poor home owner who allegedly could not obtain private
mortgage money – which, as we know from today’s subprime slime, most of them
should not have anyway.

What a
clean, clever, and creative scam by the federal central bankers and their
federal buddies at Fannie and Freddie, who, by the way, continually
oscillate between robbing everybody as Congressmen and then robbing
everybody as highly paid employees at Fannie and Freddie. That’s why
Congress does nothing to stop this National Mortgage Robbery.

Read the
following history of Fannie and Freddie, compiled by USA Today, and note how
corruption has increased:

1938:
The National Mortgage Association of Washington is chartered to increase the
liquidity in the mortgage market by creating a secondary market.

1954:
The association is converted into a mixed ownership corporation, partly
owned by private stockholders.

1968:
The association is split in two: Fannie established as privately owned,
while the Government National Mortgage Association (Ginnie Mae) is created
within the Department of Housing and Urban Development.

1970:
Fannie Mae joins the New York Stock Exchange and is authorized to buy
conventional mortgages. Congress creates the Federal Home Loan Mortgage
Corp. to provide liquidity to the mortgage market using private capital.

2002:
Freddie Mac is required to register stock with the SEC for the first time.

2003:Freddie enters into a consent order with the Office
of Federal Housing Enterprise Oversight (OFHEO) and pays a $125 million
civil money penalty for understating its 2002 earnings by $5 billion.

2004:
Stock price reaches a record $70 a share in December.

2006:Freddie Mac pays a penalty of $3.8 million to the
Federal Election Commission for donating money to candidate Michael Oxley,
chairman of the Financial Services Committee, who was running for federal
government offices. SEC fines Fannie Mae $400 million for accounting
manipulation from 1998 to 2004. In this period, executives allegedly
received more than $90 million in bonuses. SEC asked Fannie Mae to restate
its earnings from 2001, resulting in corrections of $11 billion. Fannie Mae
also violated two accounting regulations regarding costs of prepayment on
loans and derivatives the company used to lower its portfolios risk.

2008:Fannie and Freddie are currently teetering on the
edge of a $5.3 trillion bankruptcy, possibly tipping the U.S. economy into a
Depression larger than the 1930s Great Depression since they currently hold
more than 50% of U.S. mortgages, which are defaulting at record rates.

And these
are the two corrupt GSEs (Government Sponsored Enterprises) that the Federal
Reserve and Sec of Treasury Hank Paulson are doing everything possible to
keep alive. Why? Because Fannie Mae and Freddie Mac are huge monetary
pipelines through which the U.S. central bankers, the Federal Reserve,
conduct their monetary scams to rake in billions and billions of dollars in
profits, effectively transferring the wealth of Americans into the pockets
of the bankers.

The above
scenario of central bankers and their buddies at Fannie Mae and Freddie Mac
is not one of free market capitalism. It is outright robbery of the
taxpayers and can best be described as corporate welfare through a
nationalized, socialized mortgage system. Welcome to Keynesian VooDoo
Economics which is simply socialism on the installment plan. The solution:
get back to constitutional money, a 100% gold standard. – FM Duck